EVERYBODY'S BUSINESS; On Milton Friedman's Birthday, We Get the Present: Him

By BEN STEIN

Published: December 4, 2005

ONE of the infinite number of ways in which I have been blessed is in the friends I inherited from my parents. Peter M. Flanigan, investment banker and aide to my former boss, Richard M. Nixon, and ambassador to Spain. Roy L. Ash, a co-founder of Litton Industries and a budget director in the Nixon and Ford administrations. Mr. Nixon, president and peacemaker. Paul W. McCracken, genius economist and adviser to three presidents. C. Lowell Harriss, a super teacher and emeritus professor of economics at Columbia University. Anna Jacobson Schwartz, a renowned economist and statistician. And the list goes on and on.

But at the top of the totem pole for their contributions to man's progress and to human understanding comes Milton Friedman, and his wife, Rose D. Friedman. This week, a giant f? is being held in their honor (nominally about his 90th birthday, although he actually turned 93 in July) in Los Angeles. I was to be the master of ceremonies, but I was also needed to preach the good gospel of freedom and gratitude at the University of Utah that night, so I think I will tell a little bit about this giant of a man right now.

In addition to being an emeritus professor of economics at Chicago, where he taught from 1946 to 1976, Milton Friedman is:

1. A brilliant mathematician;

2. A spectacularly original and insightful economist (winner of one of the first Nobels in economic science, in 1976, when they were being given to truly heavy hitters instead of the uneven selection we sometimes see today);

3. A gifted writer;

4. A tireless crusader for education for the disadvantaged;

5. A loyal and helpful friend; and

6. Above all, a fearless fighter for individual freedom.

His wife has stood by him and collaborated in these triumphs.

I first came to know Milton and Rose Friedman as something other than pals of my Ma and Pa in 1964-65, when Professor Friedman was, for one fabulous year, the Wesley Clair Mitchell Research Professor of Economics at Columbia, while on leave from his beloved Chicago. I was a junior at Columbia and madly in love with a girl named Cathy, who was at Chicago. On my first visit to Professor Friedman's office, I was lamenting the fact that Cathy was so far away and that I could never possibly find a girl I loved as much in a small town like New York. ''Benjy,'' Professor Friedman said, ''I can tell you as a statistician that if there were only one right woman for every man, they would never find each other. Go out and find someone else.'' It was a flashing insight (and, indeed, I soon found a much more pleasant girlfriend named Mary right across the street at Barnard).

A few days later, when I was crossing Broadway at 116th Street to get to lunch at a Chock full o'Nuts restaurant with Professor Friedman, I urged him to run ahead and cross against the light. ''Benjy,'' he said, ''why should we risk the rest of our lives to save 20 seconds?''

These were my first hints that I was in the presence of genius. Although he was working in the graduate school, Professor Friedman let me be a pupil. If memory serves, the text we used was the book he had written with Dr. Schwartz (one of the truly great unsung heroes of economics and my late mother's best friend at Barnard), ''The Monetary History of the United States.'' This book was the culmination of their analysis of the connection between the quantity of money and business cycles in the United States economy.

Until ''The Monetary History,'' the prevailing view of economists was that the supply of money affected the price level but not the real level of economic activity. By dint of painstaking research and formulas, Professor Friedman and Dr. Schwartz showed that changes in the money supply greatly affected real levels of output and employment.

The main thesis of the book was that the Great Depression had been caused not by changes in tariff laws (always a questionable notion at best), not by the stock market crash (even more questionable), but by catastrophically wrongheaded decisions by the Federal Reserve Board in the period 1929-33 and again in 1936-37. The Fed -- obsessed with fears of inflation even as the economy was collapsing -- shrank the money supply drastically and basically choked the life out of the economy. (There was also a fascinating ethnic and racial angle to the story, which Professor Friedman later related to me: certain potentates at the Fed were doing this in part as an anti-Semitic reaction to the views of a Jewish Fed official named Eugene I. Meyer, who was also owner of The Washington Post and father of Katharine Meyer Graham.)

In the world of economics, this was a discovery on a par with the theory of relativity in physics or Copernican astronomy. There is simply no way to exaggerate its importance. The use of the money supply to regulate the economy and to prevent future depressions was largely born of the work by Professor Friedman and Dr. Schwartz. It was, in every way, lifesaving.

There was an immense additional amount of work by Professor Friedman in economics and econometrics, and much of it had to do with the relation of the price level, monetary aggregates, output and unemployment to each another, and especially the key role of expectations in thwarting economic policy. For this work, he won the Nobel. But economics was just the beginning of his work, along with his wife's.